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Chapter 6
Understanding theManagement Process
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 2
Learning Objectives
1. Define what management is.
2. Describe the four basic management functions: planning, organizing, leading and motivating, and controlling.
3. Distinguish among the various kinds of managers in terms of both level and area of management.
4. Identify the key management skills and the managerial roles.
5. Explain the different types of leadership.
6. Discuss the steps in the managerial decision-making process.
7. Describe how organizations benefit from total quality management.
8. Summarize what it takes to become a successful manager today.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 3
Management
…the process of coordinating peopleand other resources to achieve the
goals of an organization.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 4
Figure 6.1: The Four MainResources of Management
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 5
Organizational Resources
Material ─ tangible physical resources
Human ─ people, most important asset
Financial ─ funds organization uses to meetobligations to investors and creditors
Informational ─ knowledge about changes in the industry
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 6
Figure 6.2: The Management Process
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 7
Planning
…establishing organizational goalsand deciding how to accomplish them.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 8
Planning
MissionA statement of the basic purpose that makes an organization different from others.
Strategic planningThe process of establishing an organization’s major goals and objectives and allocating the resources to achieve them.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 9
EstablishingGoals and Objectives
GoalAn end result an organization is expected to achieve over a one- to ten-year period. Set at every level of company Must be consistent among levels Optimization = balancing process
Objective A specific statement detailing what the organization intends to accomplish over a shorter period of time.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 10
Plan
…an outline of the actions by whichan organization intends to accomplish
its goals and objectives.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 11
Figure 6.3: Types of Plans
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 12
Strategic Plan
…an organization’s broadest plan, developed as a guide for major policy
setting and decision making.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 13
Tactical Plan
…a smaller-scale plan developedto implement a strategy.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 14
Operational Plan
…a type of plan designed to implement
tactical plans.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 15
Contingency Plan
…a plan that outlines alternativecourses of action that may be takenif an organization’s other plans are
disrupted or become ineffective.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 16
Organizing
…the grouping of resources andactivities to accomplish some end result
in an efficient and effective manner.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 17
Leading and Motivating
Leading ─ influencing people to work toward a common goal
Motivating ─ providing reasons for people to work in best interests of an organization; people’s motivations vary
Leading + Motivating = DirectingLeading + Motivating = Directing
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 18
Controlling
…the process of evaluating andregulating ongoing activities to ensure
that goals are achieved.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 19
Figure 6.4: The Control Function
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 20
Managers’ Classifications
Level in organization
Area of management
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 21
Levels of Management
Top ManagerGuides/controls overall fortunes of an organization
Middle ManagerImplements the strategy and major policies developed by top management
First-Line ManagerSupervises the activities of operating employees
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 22
Figure 6.5: Management LevelsFound in Most Companies
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 23
Figure 6.6: Areas ofManagement Specialization
SpotlightHow Much Do Executives in Selected Business Areas Earn Yearly?
Source: www.execunet.com, accessed November 25, 2008.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 24
Manager Specialists
Financial ManagerResponsible for financial resources
Operations ManagerManages systems that convert resources into goods/services
Marketing ManagerFacilitates exchange of products between organization and its customers/clients
Human Resources ManagerManages employee programs and employment practices
Administrative ManagerNot associated with any specific function; provides overall administrative guidance/leadership
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 25
Effective Managers
Possess certain important skills
Are able to use those skills in a number of managerial roles
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 26
Key Management Skills
Technicalability to accomplish a specialized activity
Conceptual ability to think in abstract terms
Interpersonalability to deal effectively with people inside and outside organization
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 27
Role
…a set of expectations that one must fulfill.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 28
Managerial Roles
Decisional ─ involves aspects of decision making
Interpersonal ─ deals with people
Informational ─ gathers or provides information
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 29
Decisional Roles
Entrepreneur ─ voluntary initiator of change
Disturbance Handler ─ resolves emotional differences
Resource Allocator ─ decides how resources should be distributed in the organization
Negotiator ─ brings resolution to conflicting points of view
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 30
Figurehead
Liaison
Leader
Interpersonal Roles
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 31
Monitor
Disseminator
Spokesperson
Informational Roles
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 32
Leadership
…the ability to influence others.
Formal Informal
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 33
Styles of Leadership
Authoritarian
Laissez-faire
Democratic
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 34
The ‘best’ leadership seems to occur when the leader’s style
matches the situation.
Best Leadership Style?
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 35
Rules for Leaders
1. Audit your company cultures.
2. Informed people don’t fear change.
3. Beware “Aspirational Accounting.”
4. Empower your people─turn them loose.
5. Prevent erosion of human assets.
6. Be generous with what you know.
7. Expand your roster.
8. Don’t judge a man by the size of his wallet.
9. Harness your skills for good.
10.Groom your people for success.
Fast Company, “25 Rules for Leaders,” http://www.fastcompany.com/articles/2002/05/rtsd_quotes.html.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 36
Figure 6.7: Major Steps in Decision Making
…the act of choosing one alternativefrom a set of alternatives.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 37
Problem
…the discrepancy between an actual condition and a desired condition.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 38
Rules of Decision Making
Know what decision should accomplish Allow time to make decision “Sleep on” critical/complex decisions Ask the right questions Seek other opinions Understand the risks Be aware of resources Obtain new information
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 39
Generating Alternatives
1. Brainstorm
2. “Blast! Then Refine.”
3. Trial and Error
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 40
“Satisfice”
…describes a solution that is only adequate and not ideal.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 41
Implementation Requires
Time
Planning
Preparation of personnel
Evaluation of results
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 42
Total Quality Management
…the coordination of efforts directed at improving customer satisfaction, increasing employee
participation, strengthening supplier partnerships, and facilitating an organizational atmosphere of
continuous quality improvement.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 43
Components of TQM
Customer Satisfaction
Employee Participation
Strengthening Supplier Partnerships
Continuous Quality Improvement
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 44
Critical IssuesThat Affect TQM Success
Top management must give it top priority and frequent attention
Management must coordinate specific elements of TQM to work in harmony with each other
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 45
Financial Benefits of TQM
Lower operating costs
Higher return on sales/investments
Ability to use premium pricing
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 46
Successful Manager Today
Long work hours
Time spent getting information from individuals
Personal skills
• Oral communication• Written communication• Computer• Critical thinking
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 47
Highest Paid CEOs, 2008
Source: Forbes.com, “CEO Compensation,” http://www.forbes.com/lists/2008/12/lead_bestbosses08_CEO-Compensation_Rank.html.
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 48
1. People in an organization are what type of resources?
a) Materialb) Informationalc) Inventoryd) Humane) Financial
Chapter Quiz
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 49
2. In executing their functions, managers must first
a) organize activities.b) establish goals.c) motivate employees.d) evaluate activities.e) select employees.
Chapter Quiz (cont.)
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 50
3. Roles such as entrepreneur, disturbance handler, and resource allocator are types of _____________roles.
a) interpersonalb) informationalc) decisionald) leadershipe) ownership
Chapter Quiz (cont.)
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 51
4. One type of leadership style is
a) laissez-faire.b) CEO.c) entrepreneur.d) negotiator.e) bureaucratic.
Chapter Quiz (cont.)
Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 52
5. All of the following are reasons for a greater focus on quality by U.S. firms except
a) competition from foreign firms.b) customers that are more demanding.c) unpredictability on Wall Street.d) poorer financial performance.e) reduced market share.
Chapter Quiz (cont.)